The Scotts Valley, Calif.-based company said it pulled in $3.1 billion in revenue for its third fiscal quarter, which ran from January through March, and $344 million in net income. Net income per share came to 65 cents.

While the figures for the January-March represents an increase in revenue and net income over last year, retail sales of drives and sales into the notebook market in the past three months came in at less than expected, said CEO Bill Watkins in a prepared statement.

The company, however, also lowered forecasts for the current quarter. Seagate says revenue will come to $2.85 to $3.0 billion while net income will come to 41 to 45 cents per share, excluding certain charges. Analysts have expected $3.1 billion and 57 cents a share excluding charges. It is unclear what might be causing the more drastic drop off in net income, but it could be price declines, a never-ending fact of life for hard drive makers.

(Last year at this time, Seagate reported revenue of $2.8 billion and net income of $212 million, but there were non-recurring charges in both quarters and last year's quarter was a disappointment.)

In all, Seagate shipped 43 million units during the quarter. In the previous quarter, the end of 2007, the company shipped 50 million units. Business usually drops off from the last quarter of a year to the first quarter by around 6 to 12 percent. Thus, the decline in shipments is a little steeper than the norm.

Update: Matt Bryson of Avian Securities concurred, stating that shipments were about three million light in the quarter. The extra inventory will cause earnings to sag a bit, but the second half will be stronger.